PART ONE
ITEM NO. 10
REPORT OF THE CITY TREASURER
TO THE: AUDIT & ACCOUNTS COMMITTEE
ON: Wednesday 27th January 2010
TITLE: INTERNAL AUDIT OUTPUT REPORT APRIL TO DECEMBER 2009/10
RECOMMENDATION:
Members are requested to consider the contents of the report.
EXECUTIVE SUMMARY:
The purpose of this report is to inform Members of the resources utilised by
Internal Audit during 2009/10, the activities undertaken in the reporting period, and
the planned work for the fourth quarter of 2009/10.
BACKGROUND DOCUMENTS:
(Available for public inspection)
Quarterly Committee reports, Audit Management Information System.
KEY DECISION: NO
DETAILS:
See report attached.
KEY COUNCIL POLICIES: N/A
EQUALITY IMPACT ASSESSMENT AND IMPLICATIONS: N/A
ASSESSMENT OF RISK:
Internal Audit projects are managed within the Unit’s risk based audit protocols
aimed at giving assurance regarding the management of the City Council’s key
business risks.
SOURCE OF FUNDING:
Existing revenue budget.
LEGAL IMPLICATIONS Supplied by N/A
FINANCIAL IMPLICATIONS Supplied by N/A
OTHER DIRECTORATES CONSULTED: N/A
CONTACT OFFICER: Andrew Dalecki
WARD(S) TO WHICH REPORT RELATE(S): N/A
TEL. NO. 0161 607 6961
INTRODUCTION
This report provides Members of the Audit & Accounts Committee with details of the
resources utilised by Internal Audit since the commencement of Internal Audit’s
2009/10 plan and the activities undertaken, primarily reports issued, since the last
sitting of this Committee in June 2009.
The report advises Members of the volume of recommendations categorised by
critical, high, medium, and low, in with respect of the control environment under
review. In addition, the report advises Members of the progress made in the
implementation of agreed recommendations by way of post implementation reviews.
RESOURCES UTILISED
The planned chargeable days, that is those which can be directly attributable to a
client, for the financial year 2009/10 are 2194. For the period 1st April to 31st
December 2009, 74% of the overall plan for Salford Internal Audit, including planned
Computer Audit, and Special Investigations, had been delivered relative to the
‘chargeable days’ element. Based on this level of outturn, it is anticipated that the
target for the year of 100% of the Audit Plan should be achieved.
Internal Audit continues to respond to the need to undertake special investigations.
During the period of account, Internal Audit has responded to a high number of
allegations, and already incurred 163% of its planned activity in this regard.
Investigations concluded during this period of account are reported separately under
Part Two of this Committee.
Exhibit A - Internal Audit Progress Report (As at 31st December 2009)
Directorate
Actual Days
Annual Plan
(Total to date)
(Total to date)
% Plan
Achieved
Chief Executive's
111
172
65%
Children's Services
516
425
121%
Community Health & Social Care
72
195
37%
Customer & Support Services
246
501
49%
Environment
83
87
95%
Sustainable Regeneration
63
60
105%
General
14
329
4%
1105
1769
62%
Irregularity
368
225
163%
Management and Planning
147
200
73%
Total
515
425
121%
Combined Total
1619
2194
74%
Total
Page 3 of 10
REPORTING
During the period from the 1st June to 31st December 2009, a total of 12 audit reports
have been issued to various client directorates across the council. This does not
include reports that have been issued to schools under our FMSiS reporting
protocol.
The table at Exhibit B below shows the audits that have been undertaken and the
recommendations that have been put forward for management consideration.
A total of 116 recommendations have been made and classified over four categories
of critical, high, medium, and efficiency (See Exhibit E on Page 11 for explanations
of the different categories). The distinction between the categorisation of
recommendations is based on their implications and impact on the system under
review. There is a level of auditor judgement in determining which are critical or high
recommendations and those which fall into the other two categories.
Our recommendations are designed to improve the control environment within the
auditee’s area of responsibility and it is pleasing to note that all of the
recommendations made have been accepted by management. Our audit reports
include an action plan that records the detail of our findings, the related
recommendations and the action management intend to take to implement our
recommendations. This provides a record that progress can be monitored against
when we undertake our post implementation reviews.
The level of assurance given to each audit is a balanced judgement based upon the
subjects’ established system of controls, the subjects approach to risk management,
and the nature of any recommendations made (See Exhibit F on Page 11 for
explanations of the different levels of assurance).
Exhibit B - Recommendation Priorities
Recommendations
Audit
Assurance
Level
Critical
High
Medium
Efficiency
Number
Agreed
0
0
2
1
3
Moderate
0
2
3
0
5
Limited
0
0
2
0
2
High
0
2
12
0
14
Limited
St Mary’s RC (Swinton)
Primary School (Change of
Head Audit)
0
1
1
0
2
Moderate
Walkden High School
0
1
5
0
6
Moderate
0
3
6
0
9
Limited
0
2
7
0
9
Moderate
Network Gateway
SAP Technical
SX3 CIPFA Review
Christ Church (Patricroft) CE
Primary School
Irlam & Cadishead Community
High School
Moorside High School Audit
Page 4 of 10
Recommendations
Audit
Assurance
Level
Critical
High
Medium
Efficiency
Number
Agreed
0
3
8
0
11
Limited
Westwood Park Primary
School
0
3
5
0
8
Moderate
Analysis of Fraud and
Corruption Survey
0
0
9
0
9
Moderate
Arrangements for
Implementing the International
Financial Reporting Standards
0
1
4
0
5
Moderate
Annual Governance Statement
2008-09
0
0
2
0
2
Moderate
LPSA2 (Targets 1a, 4, 5, 6, 7,
8, 9, 10 & 11)
0
0
0
0
N/A
High
0
0
1
0
0
Moderate
0
6
0
0
6
Limited
3
21
0
0
24
no assurance
Mossfield Primary School
Crime and Design
CCTV Chapel Street
Barton Moss Secure Unit
POST IMPLEMENTATION REVIEWS
Internal Audit undertakes Post Implementation Reviews (PIRs) of all the services
that have been subject to an audit.
The timing of a PIR is determined by the agreed implementation dates, detailed
within the audit report, and is generally undertaken within six months of the audit.
The PIR generally takes the form of an actual site visit to verify the implementation
of agreed recommendations. However, the PIR may be undertaken by a process of
self-assessment and formal notification to Internal Audit of implementation of the
recommendations.
During the period from the 1st September to 31st December 2009, a total of 6 post
implementation reviews have been reported. Exhibit C below provides details of the
progress made by directorates in implementing the agreed recommendations.
In respect of the post implementation reviews undertaken within the reporting period,
there are significant outstanding issues within 5 of the areas examined.
Revised implementation dates have been agreed with management to implement
the recommendations as soon as possible. Where there are high priority
recommendations, or a significant number of medium priority recommendations
outstanding, we will be seeking to confirm their implementation.
Page 5 of 10
Exhibit C - Results of Post Implementation Reviews
Recommendations
Post Implementation
Review
Holy Cross and All
Saints R.C. Primary
School
Made:
Assurance
Level
Implemented: Outstanding:
Critical:
0
0
0
Original:
High:
0
0
0
N/A
Medium:
8
6
2
Revised:
Efficiency:
0
0
0
Moderate
Critical:
0
0
0
Original:
High:
0
0
0
N/A
Medium:
5
4
1
Revised:
Efficiency:
0
0
0
Moderate
Critical:
0
0
0
Original:
High:
0
0
0
N/A
Medium:
5
5
0
Revised:
Efficiency:
0
0
0
High
Critical:
0
0
0
Original:
High:
0
0
0
N/A
Medium:
2
1
1
Revised:
Efficiency:
0
0
0
High
Audit Comment: N/A
St Marys RC Primary
School (Eccles)
Audit Comment: N/A
Wentworth Barrier Free
Resource
Audit Comment: N/A
Salford Women's Aid
PIR 2
Audit Comment: N/A
Page 6 of 10
Recommendations
Post Implementation
Review
Made:
Assurance
Level
Implemented: Outstanding:
Critical:
0
0
0
Original:
High:
0
0
0
N/A
Medium:
0
0
0
Revised:
Efficiency:
0
0
0
N/A
Critical:
0
0
0
Original:
High:
2
2
0
Moderate
Medium:
4
3
1
Revised:
Efficiency:
0
0
0
High
Main Accounting System
PIR
Audit Comment: N/A
Looked After Children
PIR
Audit Comment: N/A
AUDIT WORKPLAN FOR QUARTER 3 (2009/10)
Members have stated that they would welcome an indication of the planned
workload of Salford Internal Audit for the ensuing period of account. The table at
Exhibit D below provides an indication of the areas we intend to cover during this
period.
Members need to be aware that these subject matters have arisen as a result of the
annual audit planning process, and that these are only indicative subject matters
due to our flexible planning methodology, and which could be subject to
amendment. Committee summary reports on these subject matters will be issued to
Members at the conclusion of each review.
Exhibit D
Subject Matter
Directorate
Audits currently being reported
Health & Safety
Sustainable Regeneration
Urban Vision Client Side
Sustainable Regeneration
Community Safety
Chief Executive’s
Insurance Claims PIR
Environment
Partnerships PIR
Sustainable Regeneration
Purchase Cards
Customer & Support Services
Page 7 of 10
School Crossing Patrols
Sustainable Regeneration
Schools PIRs for 08-09 School Audits
Children’s Services
Schools Audits and FMSIS Assessments
Children’s Services
R.M.C.H. (Assets and Accounts)
Children’s Services
Purchase Cards - Children's Homes
Children’s Services
Greaves Trust
Customer & Support Services
Council Tax
Customer & Support Services
Audits currently in progress
National Indicators
Chief Executive’s
Major Adaptations
Community, Health, & Social Care
Sustainable Regeneration Complaints (PIR)
Sustainable Regeneration
Museum
Community, Health, & Social Care
Citywide Services
Environment
Managing Overtime
Environment
Agency Workers
Environment
Incident Reporting
Schools PIRs for 07-09 School Audits and
FMSiS
Environment
International Financial Reporting Standards
Customer & Support Services
Schools Audits and FMSIS Assessments
Children’s Services
Crematorium and Cemeteries
Environment
Transport
Community, Health, & Social Care
Sickness Management
Community, Health, & Social Care
Direct Payments
Community, Health, & Social Care
Depot Security
Environment
Smart Cards
Community, Health, & Social Care
Children’s Homes
Children’s Services
Housing & Council Tax Benefits
Customer & Support Services
Salford Women’s Centre
Community, Health, & Social Care
Contact Point
Children’s Services
Children’s Services
New audits planned to start in Quarter 4 2009/10
Insurance Claims & Highway Investment
Customer & Support Services/ UV
Telephone Contacts and Referral System
Children’s Services
Electronic Call Monitoring
Community, Health, & Social Care
Page 8 of 10
Lift Centres
Community, Health, & Social Care
Data Protection Act
Customer & Support Services
Freedom of Information
Children’s Services
Net-TOPIC Grant
Safeguarding Children (Managing
Allegations) PIR
Integrated Working in Localities
Sustainable Regeneration
Fostering & Adoption
Children’s Services
Commissioning
Community, Health, & Social Care
Gifts and Hospitality
Sustainable Regeneration / UV
Extended Schools 2nd PIR
Children’s Services
Sure Start 2nd PIR
Children’s Services
Section 75
Children’s Services
Payroll
Customer & Support Services
Section 106 (planning obligations) PIR
Sustainable Regeneration
Treasury Management
Customer & Support Services
Registration Service PIR
Customer & Support Services
School Crossing Patrols PIR
Sustainable Regeneration
Children’s Services
Children’s Services
SUMMARY
The report has identified that at the end the third quarter 2009/10, Salford’s Internal
Audit team is on target to achieve its planned commitments, including computer
audit and investigations.
Recommendations arising from our reviews appear to have been appropriate in their
objectives of improving the control environment as this can be demonstrated by the
acceptance of management to implement such actions.
Furthermore, our Post Implementation Reviews have highlighted areas where
recommendations have not been completely implemented, and where appropriate,
amended timescales have been agreed for their introduction.
Page 9 of 10
Exhibit E - Recommendation Priorities:
Critical
High
Medium
Efficiency
These recommendations are control weakness that could have a
significant impact on achievement of the council’s (or respective
organisation’s) objectives.
These recommendations are likely to include fundamental control
breakdowns within the audited service, illegal acts, fraud, and
recommendations for improvements in systems design.
These recommendations are likely to consist of non-recurring,
explainable events in internal controls which may have already been
rectified.
These recommendations relate to improvements in working
practices that would lead to a more efficient and/or cost reduced
service.
Exhibit F - Levels of assurance:
High
Moderate
Limited
No
Key controls are adequately designed and are operating effectively to
deliver the area’s key objectives.
Some weaknesses in the design and/or operation of controls, but
low impact on the achievement of the area’s key objectives.
Weaknesses in the design and/or operation of controls which could
have a significant impact on the achievement area’s objectives but
should not have a significant impact on the achievement of the
council’s objectives.
There are weaknesses in the design and/or operation of controls that
not only have a significant impact on the achievement of the area’s
objectives but also may put at risk the achievement of the council’s
objectives.
Page 10 of 10